Pay packages for university vice chancellors are rising by an average of £9,700 per year – the equivalent of one year's undergraduate fees under the new funding system. Although not unprecedented, in a new era of campus politicisation and financial hardship, this news will cause uproar on many campuses. To properly address the root of the problem, however, students and university staff must challenge the deeper ideological and managerial consensus that has allowed such inequality and waste to persist.

With job security, pay and pensions under attack everywhere, it is no wonder that the University and College Union is up in arms at high managerial pay. This week London Metropolitan University announced the redundancy of 229 staff, 201 of which are academic grade, across seven faculties – adding to last year's 70% cut to undergraduate courses.

Across the country, the increasingly comfortable position of many vice chancellors contrasts heavily with the daily realities of life for university employees in the chaos being wrought by the present government.

Students are also facing an attack on their conditions. With millions of people now in higher education, student poverty can no longer be portrayed as a melodramatic middle-class concern – and it is set to get worse. With bursaries being raided by many university managements to fund fee waivers, living costs are rising and accommodation prices are sky-rocketing. A catered place in a University of London hall, with shared bathroom and toilet, will cost you upwards of £170 per week in 2012-13, the first year of £9,000 fees.

The high pay of university heads, although a good headline and a reasonable criticism, is not the end of the story for high managerial pay at universities. In March 2010, University College London had 311 staff paid more than £100,000. When approached by the Evening Standard about the fact that his cleaners were living in poverty, the UCL provost Malcolm Grant, himself on £404,000 at the time, described the London living wage as a "luxury" that he could not afford. Although Grant later committed to paying the living wage, this has still not been implemented, and many auxiliary staff have now been outsourced, stripping away their pension rights and sick pay.

The concentration of wealth at the top of universities is merely one manifestation of an increasingly managerial approach in higher education. Most vice chancellors have no mandate for their actions other than the (often pretty much automatic) consent of their governing bodies, which are more and more populated by unelected business people and managers rather than academics.

This approach has been backed up by a much broader ideological consensus about higher education, which has gone almost unchallenged for more than a decade. David Eastwood, the vice chancellor of Birmingham University, was singled out by the report as the second-highest-paid vice chancellor in the country. He was also a member of the Browne review panel, and in December reviewed the higher education debate that exploded over the past year. Tellingly, he described the events of the past year as if he had no role in them. This is a common rhetorical technique for vice chancellors, who often balance a cosy relationship with government with an increasingly restless atmosphere on campus.

In reality, vice chancellors, particularly in the Russell Group, have spent serious energy lobbying for a higher education system increasingly funded by fees, increasingly motivated by individual rather than societal benefit, and increasingly run like a business – with soaring executive pay.

Parallels can be drawn with Grant's record as provost of UCL. He has also very publicly backed higher fees, and has been at the forefront of arguing for research funding concentrations, which would have left poorer universities facing closure. Grant's closeness to consecutive governments is reflected in his role as trade envoy for the prime minister, and his latest appointment as the chair of the NHS commissioning board – a controversial body invented by Andrew Lansley's reforms.

Under the prevailing policy consensus in higher education, vice chancellors and government ministers have learned to speak the same language. Rightwing political agendas and questionable ethical practices have become hidden behind a wall of innocuous newspeak. "Excellence" – often a byword for regressive funding concentrations or for national pride – and "sustainability" – a euphemism for taking public money out of universities – are the order of the day, precisely because they mean nothing and can be filled with consensus dogma.

The closeness of university managements to the government has been a disaster for everyone in education. This year, the government will try to push through its higher education white paper. On top of the EMA cuts, fee rises and almost total teaching grant cuts of last year, the white paper has been roundly denounced as an attack on the very idea of education as a public service. It represents the radical outcome of decades of policy consensus in higher education under Labour and coalition governments, none of which has had an electoral mandate.

Picking up the pieces from the fee rises and the higher education white paper, students and university staff will rightly ask who gave successive governments the permission to launch this attack. Set against a prevailing consensus of unaccountable and overpaid politicians and vice chancellors, the democratisation of universities and colleges may yet prove to be a key point of reference for those who want to keep fighting for an education system run as a social good, accessible to all.